Wednesday, March 30, 2011

Align Technology to Acquire Intra-Oral Scanning Leader Cadent for $190 Million

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I've been hearing some rumblings on tis, but now the word is out.  The people that own Invisalign now now Cadent, the makers of the iTero digital impression system.  Here is the press release with all the info?

Acquisition Positions Align as a Leader in Intra-Oral
Scanning and Accelerates Adoption of Invisalign

SAN JOSE, Calif., March 29, 2011 (GLOBE NEWSWIRE) -- Align Technology,
Inc. (Nasdaq:ALGN) today announced that it has signed a definitive
agreement to acquire privately-held Cadent Holdings, Inc. (Cadent), a
leading provider of 3D digital scanning solutions for orthodontics and
dentistry based in Carlstadt, New Jersey. Cadent strengthens Align's
ability to drive adoption of Invisalign by integrating Invisalign
treatment more fully with mainstream tools and procedures in doctors'
practices. The combination of the two companies will help accelerate
the use of intra-oral scanning in the dental industry by leveraging
Align's global sales reach, extensive professional and consumer
marketing capabilities and base of over 55 thousand users.

Over the next 5 years, intra-oral scanners will become widely used in
dental practices and intra-oral scanning technology will transform the
dental industry. According to iData Research, Inc., the growth rate for
intra-oral scanners will exceed 20% between 2010 and 2015. The
acquisition of Cadent extends Align's strategic leverage by
demonstrating the value of applications at chair-side that dramatically
simplify and streamline treatment, and make the entire Invisalign
procedure easier on the patient and more efficient for the practice. In
addition, the use of digital technologies for restorative dentistry
such as CAD/CAM or in-office restorations has also been growing rapidly
and intra-oral scanning is required to enable this essential part of
dental practices. The acquisition of Cadent positions Align as a leader
in one of the best growth opportunities in dentistry and medical
devices today.

"We are excited about the opportunities for growth that Cadent
provides, not only in terms of accelerating adoption of intra-oral
scanning among dental professionals but also in creating greater value
for existing Invisalign users," said Thomas M. Prescott, Align
Technology president and chief executive officer. "Cadent has a strong
team of very talented people and a culture similar to ours with the
drive, agility and speed necessary to continue delivering innovative
solutions for our customers."

Cadent leads the intra-oral scanning industry in digital optics and
powder-less scanning. Their overall technology is at the forefront of
the industry trend toward greater use of digital imaging solutions
expected to become more widely used in dental practices. Cadent brings
complimentary market knowledge and innovative technology in CAD/CAM
restorative dentistry to Align, including capabilities in digital
records storage and digital impressions for fabrication of crown and
bridge, veneers, implants, and other restorative procedures. Like
Align, Cadent also has strong expertise in advanced digital modeling,
robust software development, and integrated systems.

Cadent has a portfolio of best-in-class products and services for
restorative dentistry and orthodontics which include the iTero and iOC
intra-oral scanners. Cadent's iTero technology provides dentists with a
full range of restorative choices, flexibility to choose labs and
fabrication processes, and control in providing the highest standard of
care for their patients. Cadent's iOC technology, used primarily by
orthodontists, ensures a more accurate first impression, enables high
value clinical applications and a significantly better patient
experience. Cadent also has a range of leading orthodontic services and
products including OrthoCAD iQ, OrthoCAD iCast and OrthoCAD iRecord.

The acquisition of Cadent follows the January 2011 announcement of a
joint development agreement between Align and Cadent to co-develop
Invisalign software applications that will run on Cadent scanners. The
acquisition builds on the development agreement by providing a
dedicated digital scanning platform for delivering Invisalign
chair-side applications to dental practitioners and extends Align's
presence into restorative dentistry. The combination of the two
companies' market leading positions and technologies provides a
significant opportunity to create growth and to build value for
customers and shareholders.

As part of an ongoing program to evaluate interoperability of
intra-oral scanning systems for future use with Invisalign treatment,
Align is in final beta tests with Cadent's systems and expects to
announce interoperability for their scanners in the second quarter of
2011.

Under the terms of the agreement, Align will pay approximately $190
million in cash in exchange for all shares of Cadent. The acquisition
is subject to various standard closing conditions, including the
expiration of the applicable waiting period under the Hart Scott Rodino
Act (HSR), and is expected to close during the second quarter of 2011.

Align anticipates that the acquisition of Cadent, on a GAAP basis, will
dilute fiscal 2011 earnings per share and expects non-GAAP diluted EPS
for the year to be in a range of $0.70 to $0.75, excluding acquisition
related costs, consisting of amortization of acquired intangibles,
transaction related costs and employee retention program costs. The
Company expects the transaction to be accretive to non-GAAP EPS for
fiscal 2012, excluding acquisition related costs, consisting of
amortization of acquired intangibles and employee retention program
costs.

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